Posted on: 25th Feb, 2008 01:23 pm
i have a 2nd mortgage that has been forgiven or charged off.
This debt is on my credit report. What do i do to clear this debt off of my credit report? What do i ask or tell the lender? I am still in my home & paying on 1st mortgage.
This debt is on my credit report. What do i do to clear this debt off of my credit report? What do i ask or tell the lender? I am still in my home & paying on 1st mortgage.
Hi Lisa,
Welcome to forums.
What does your credit report say about the charged off debt? usually when a debt is canceled or charged off, the credit report should reflect the same.
However, if you can pay off a part of the unpaid debt (in agreement with the lender) even after charge-off, then you can request the lender/company to report it to the credit bureau as "paid as settled".
Charge-off means the lender won't harass you to pay the debt or won't ask for repayment. But you can still pay it off, it's up to you and it helps because it can improve your credit score.
Please read through an earlier discussion on Charge-off on credit report to know more on this.
Thanks
Welcome to forums.
What does your credit report say about the charged off debt? usually when a debt is canceled or charged off, the credit report should reflect the same.
However, if you can pay off a part of the unpaid debt (in agreement with the lender) even after charge-off, then you can request the lender/company to report it to the credit bureau as "paid as settled".
Charge-off means the lender won't harass you to pay the debt or won't ask for repayment. But you can still pay it off, it's up to you and it helps because it can improve your credit score.
Please read through an earlier discussion on Charge-off on credit report to know more on this.
Thanks
am i to understand that the lender charged off its asset because there was a lack of equity in your home? no matter the status of the loan itself at this time, there remains a lien on your home, i am sure.
no lender with any sense would release the lien against the property; so despite your thoughts that this loan has been "forgiven" i surmise that upon sale of your home, whenever that takes place, this lender will be standing at the closing table with a hand out, requesting a check to pay the debt in full.
it isn't exactly "up to you" if you wish to pay it in full - i don't believe. i will be astonished to find out that they are not going to seek repayment in full at some point.
no lender with any sense would release the lien against the property; so despite your thoughts that this loan has been "forgiven" i surmise that upon sale of your home, whenever that takes place, this lender will be standing at the closing table with a hand out, requesting a check to pay the debt in full.
it isn't exactly "up to you" if you wish to pay it in full - i don't believe. i will be astonished to find out that they are not going to seek repayment in full at some point.
I would not think that they will take this off your report, they will want you to pay at least that consequence of telling the world that you are a credit risk no matter what the reason. I can not believe that they let it go so easily, I would bet that they will sell this old debt to another company and you will start recieving collection attempts from someone on this account sooner or later. How much was the debt and how long ago did the charge off happen. I have had this happen on a credit card for as little as $300, so if it is more than that you can bet your bippy that someone will purchase it and you will start recieving collection notices. I have one who is taking me to court for an old debt that they purchased that was charged off. Just don't be surprised if this should happen down the road, junk debt buying is a growing industry, they are putting in massive call centers and hiring idiots to be their reps, if you start to get these calls, go to the debt or credit forums to get some good advice on how to handle them. You can access these two forums at the top of the page, goodluck with this.
"Forgiven" and "Charged Off" When it comes to Mortgages (or any other debt) Are TWO DIFFERENT THINGS!
""Forgiven" means just that: that the debt (2nd Mortgage loan in your case) has been FORGIVEN - the debt is cancelled and that you no longer owe tht debt in any way. If this is the case usually the creditor would provide a notice in writing of that and the lein at the courthouse is satisfied and taken off the title
"Charged Off" means that the creditor has charged it off their books, but YOU STILL OWE THE DEBT. It will still be recorded against the title and will have to be paid some day to be taken off the title.
""Forgiven" means just that: that the debt (2nd Mortgage loan in your case) has been FORGIVEN - the debt is cancelled and that you no longer owe tht debt in any way. If this is the case usually the creditor would provide a notice in writing of that and the lein at the courthouse is satisfied and taken off the title
"Charged Off" means that the creditor has charged it off their books, but YOU STILL OWE THE DEBT. It will still be recorded against the title and will have to be paid some day to be taken off the title.
Hi Lee,
I agree with you absolutely! James I feel you got a little out of the way here.
A charge-off does not imply the debt is canceled. Rather the lender/creditor considers it as a loss in it's financial records for tax purposes. The charge off indicates that the lender thinks you may not be able to pay off the debt but he does not change your obligation to pay.
The lender reports the charge-off to the credit bureau as a negative entry. Any debt which is charge-off is considered as bad debt or a non-performing asset for the lender/creditor.
So Lisa, first of all get it verified as to whether the debt is canceled/forgiven or charged-off. If it is a second mortgage charge off, you can negotiate with the second lender for a settlement worth certain dollars.
Regards,
Jessica.
I agree with you absolutely! James I feel you got a little out of the way here.
A charge-off does not imply the debt is canceled. Rather the lender/creditor considers it as a loss in it's financial records for tax purposes. The charge off indicates that the lender thinks you may not be able to pay off the debt but he does not change your obligation to pay.
The lender reports the charge-off to the credit bureau as a negative entry. Any debt which is charge-off is considered as bad debt or a non-performing asset for the lender/creditor.
So Lisa, first of all get it verified as to whether the debt is canceled/forgiven or charged-off. If it is a second mortgage charge off, you can negotiate with the second lender for a settlement worth certain dollars.
Regards,
Jessica.
Is this 2nd lien on a formerly owned property?
By all means, contact the outfit that held/holds your 2nd! Did you stop paying for some reason? Have you received notice from them? Are they out of business, and another servicer is collecting your 2nd payments?
By all means, contact the outfit that held/holds your 2nd! Did you stop paying for some reason? Have you received notice from them? Are they out of business, and another servicer is collecting your 2nd payments?